Actually, more than 70% of Fab.com's products are not drop shipped, and we've cut our delivery times in half the past 2 months and are making tons of progress there.
What's the rationale for bringing fulfillment inhouse? The economics and market trends seem to move the other way, in favor of drop shipping as much as possible. Catalog data problems? Financial? Branded customer experience? Partners can't ship properly? Just wondering...
When we take inventory we can ensure fast delivery times and a consistently Fab experience. Also, most drop shoppers are not setup to handle the type of volume Fab generated. Drop shipping maxes out at a relatively small number of orders.